Purchasing a property – Should I buy first or sell first?
So people often ask, “Should we be buying first or selling first?” Well, it really depends. In a booming market, it’s often safe to be buying first before you sell because the property prices are going to increase during your settlement period. So you won’t necessarily be left short on the sale. In a falling market, it can be dangerous because you have got a purchase price locked in but your sale price can be affected the longer the time frame is for the settlement.
So you can find your changeover price getting higher as your property price could be falling in that type of market. If you’ve bought first, this will inherently put you under a lot of pressure because you’ve now got a deadline on the sale. So it’s important to move things along quickly and it is also best to avoid that sort of pressure when you’re selling your largest asset.
You could also be under the situation where you’ve organised or have to organise bridging finance, which is costly and also stressful. It is advisable to get prepared, fully prepared. If you’re going to purchase, get prepared for your sale so the moment you find your property you want to purchase, you can immediately start to market your own. This involves getting your agent organised, so selection of agent, contract for sale from your solicitor and conveyancer, and then also getting your property prepared.
So any work you need to do in preparation, be it cleaning, decluttering, styling, that should be all ready and loaded for the moment you’re ready to purchase your property. This eliminates any delays that would see any changes in the market to put you in a bit of difficulty. If you choose to sell your property first, you’ve put yourself in a situation where you have established financial criteria for what you can later then buy at.
You can also establish the settlement period that you wish to partake in. So if you sell and settle, you’re in a position where you can either rent or you can stay in the property. If you have sold first, so you’ve agreed on a sale, this does give you the opportunity immediately when you’ve agreed on a price to act on any other properties you’ve seen.
It still gives you the chance to have a simultaneous sale and purchase. One of the major factors to consider when you’re selling is what sort of settlement period should I look at. This is the period when you’re actually…you get the money and they get the keys. So this is when you move in and move out, so to speak. So whether you’re buying first or you’re selling first, it’s very good to give yourself an extended settlement.
The extended settlement period is 42 days or 6 weeks. Basically, between yourself and the purchaser or yourself and the seller, you can organise whatever settlement period you agree on. Giving you a longer settlement period will enable a better chance for you to settle at the same time, which is ultimately the goal you want. Only one move.
The best thing you can do with selling and buying is be prepared. So do your market research but also get your property, your agent, your legal paperwork organised whichever way you’re going to go before you commit to anything. This way it will give you a lot safer process to undertake. If you need any more information, please contact us anytime.